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Wed, 11 Jul 2012 17:16:02 +0100Wed, 11 Jul 2012 17:16:02 +0100On the importance of sectoral and regional shocks for price setting : [Version Juli 2012]http://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/26876
We use a novel disaggregate sectoral euro area data set with a regional breakdown to investigate price changes and suggest a new method to extract factors from over-lapping data blocks. This allows us to separately estimate aggregate, sectoral, country-specific and regional components of price changes. We thereby provide an improved estimate of the sectoral factor in comparison with previous literature, which decomposes price changes into an aggregate and idiosyncratic component only, and interprets the latter as sectoral. We find that the sectoral component explains much less of the variation in sectoral regional inflation rates and exhibits much less volatility than previous findings for the US indicate. We further contribute to the literature on price setting by providing evidence that country- and region-specific factors play an important role in addition to the sector-specific factors, emphasising heterogeneity of inflation dynamics along different dimensions. We also conclude that sectoral price changes have a “geographical” dimension, that leads to new insights regarding the properties of sectoral price changes.Guenter W. Beck; Kirstin Hubrich; Massimiliano Marcellinoworkingpaperhttp://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/26876Wed, 07 Nov 2012 17:16:02 +0100Openness, financial markets, and policies: cross-country and dynamic patternshttp://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/6198
We document significant and robust empirical relationships in cross-country panel data between government size or social expenditure on the one hand, and trade and financial development indicators on the other. Across countries, deeper economic integration is associated with more intense government redistribution, but more developed financial markets weaken that relationship. Over time, controlling for country-specific effects, public social expenditure appears to be eroded by globalization trends where financial market development can more easily substitute for it.Giuseppe Bertola; Anna Lo Preteworkingpaperhttp://publikationen.stub.uni-frankfurt.de/frontdoor/index/index/docId/6198Thu, 29 Jan 2009 13:40:14 +0100